BMW has awarded a contract worth just over a billion euros ($1.16 billion) to China's lithium battery maker Contemporary Amperex Technology Ltd (CATL) , allowing the company to build a factory to produce cells for electric cars in Europe, the German carmaker's spokesman Glenn Schmidt said on Thursday.

CATL is scouting potential locations for a battery production facility in Europe with the German state of Thuringia encouraging the Chinese manufacturer to use a site near Erfurt, in eastern Germany.

Last month, Daimler placed an order with CATL to buy electric car battery cells.